Harbouring Ambitions of Litigation Finance: The Litigation Finance Sector gets first SRA approved training contract
August 12, 2019
2 min read
What's going on here?
Harbour has become the first company in the litigation financing sector to offer a training contract, promising hopeful graduates commercial work including drafting purchase & settlement deeds and analysing potential claims.
What does this mean?
Litigation financing is a relatively new legal phenomenon. It involves a third-party company providing funding to a claimant, to whom they had no prior connection, in exchange for a share in any settlement or award monies once their dispute concludes. Harbour is one of many litigation funders in the UK and it recently announced a vacancy for a trainee solicitor who would join with a view to entering their investments team. The role would involve evaluating the merits of cases that require funding to assess their potential profitability.
What's the big picture effect?
Now more than ever, for practitioners in contentious seats the prospect of dealing with litigation financiers is a virtual inevitability; the UK has more specialist litigation funding companies than any other jurisdiction. There are however age-old ethical concerns about third-party involvement in disputes, including the risk that the third-party will manipulate evidence or inflate the value of a claim in the name of profit. A modern regulatory approach has therefore evolved to combat these risks, and firms like Harbour are now overseen by the Association of Litigation Funders (ALF). The ALF’s Code of Conduct forbids financiers from taking control of the litigation, and in practice Harbour and other firms stop short of offering explicit legal advice. This may mean that trainees at the company will become monitors of risk as opposed to litigation practitioners, but they are also likely to have a wider exposure to the business and financial side of claims than their counterparts in private practice.
Harbour’s training contract is a further alternative route into the legal profession. In recent weeks OakNorth (a FinTech challenger bank) has also begun recruiting fledgling lawyers, and of course there are routes to qualification available through the Big 4 accountancy firms and in-house (the legal departments of large companies). On litigation finance in particular, the fact that firms like Harbour are now competing with traditional providers for legal talent represents how mainstream the sector has become in the UK legal services industry. Perhaps the key takeaway for all future solicitors is that if a litigation funder joins your opponent’s claim, you can assume that their case is a strong one.
Report written by Sam Denison
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